BoC’s Macklem see rate cuts in 2024, but with focus on core inflation trend

BoC Governor Tiff Macklem, in an interview with Bloomberg overnight, indicated that interest rate cuts are being considered “sometime in 2024,” but he emphasized that this decision hinges critically on the sustained easing of core inflation.

Macklem underlined the importance of core inflation as a key focus for BoC. He stated, “We’re very focused on core inflation.” Specifically, he pointed out the necessity for “a number of months with sustained downward momentum in core inflation” before the central bank can confidently move forward with interest rate cuts.

Nevertheles, Macklem expressed a growing confidence in the effectiveness of the current monetary policy, acknowledging that “increasingly, the conditions are in place to get us back to two-per-cent inflation.”

However, he was clear in conveying that this goal has not been fully achieved yet, stating, “but that is not yet assured, we’re not there yet.”